British families face £38billion in fuel bills as Rishi Sunak urged to provide extra help Business News

UK households face a £38billion drop in their energy bills over the coming year due to soaring wholesale gas and electricity costs, according to new analysis.

Chancellor Rishi Sunak is under increasing pressure to provide extra help to families struggling with the cost of living crisis as war in Ukraine causes major spikes in energy prices.

Fuel bills are set to rise by almost £700 in April when the energy price cap is raised – but experts are now warning that further increases are now ‘expected’ for the coming winter.

Regulator Ofgem will have to impose a further 50% increase in the energy price cap from October and push average energy bills to over £3,000, economists at Investec and Goldman have estimated.

Aurora Energy Research analysts told the FinancialTimes The move would boost household gas and electricity consumption to £74billion over the coming year, an increase of £38billion since last year.

“This is an extremely large impact, especially on low-income households,” said Dan Monzani, general manager of Aurora Energy Research.

Last month, Mr Sunak announced plans for an energy rebate loan, giving all households rebates of around £200 in October, which must then be repaid over several years.

But the Chancellor has so far resisted calls for further action to ease some of the pressure on struggling families from rising fuel bills.

Labor has called for further help through a windfall tax on oil companies, with Sir Keir Starmer warning that families could see a further £1,000 rise in household bills this autumn.

Mr Sunak held meetings with several concerned Tory MPs this week to hear ideas on how to help households with rising energy bills, PolicyHome reported.

A Tory MP said: ‘I’ve never seen the fear in people’s eyes I’m seeing right now, people are really scared. People are scared and I don’t blame them. He must do something.

Some MPs have reportedly asked the Chancellor if he can extend support for poorer households, as he also faces calls from Tory backbenchers to cut fuel taxes and green levies on fuel bills.

On Friday, Mr Sunak said he would continue to “monitor” the economic impact of the Ukraine crisis. “We have provided unprecedented support throughout the pandemic, which has put our economy in a strong position to face the current cost of living challenges,” he said.

The Chancellor added: “We know Russia’s invasion of Ukraine is creating significant economic uncertainty and we will continue to monitor its impact on the UK.”

Money-saving expert Martin Lewis has accused the government of trying to blame the war in Ukraine for the cost-of-living crisis – when people were already at risk of “starving to death or freezing”.

Ahead of a mini-budget in two weeks, he urged Mr Sunak to take further action. “We are going to see a real increase in real poverty in this country, with millions of people being thrown into poverty,” he told the BBC.